Reimbursement Feature

“Obamacare is gone. Just gone”

Robin Young • Tue, April 18th, 2017

“If Congress doesn’t approve it, or if I don’t approve it, that would mean that Obamacare doesn’t have enough money so it dies immediately as opposed to over a period of time," Trump told the Wall Street Journal last week. If the payments don’t get made, he said, "Obamacare is gone, just gone."

Current federal appropriations expire on April 28, and a partial government shutdown would follow if Republicans and Democrats cannot agree on how to extend funding.

Oh, and all health insurers have to file their 2018 rate plans with each state insurance commissioner by May or June (depending on the state).

They don’t know what to file.

Do they assume that the current ACA (Affordable Care Act) status stays the same?

Do they assume that “Obamacare is gone. Just gone.”?

John Salciccioli, director of actuarial services for commercial business at Independent Health, a nonprofit, New York-based insurer, told TheWashington Post that his plan was looking hard at the possibility that the individual mandate goes away.

His company must make its rate filings in early May.

“What we have to file is kind of assuming status quo, everything as it is will still be in place in 2018,” Salciccioli said. “It’s my belief, or my hope at least, if something came down after we filed, they would at least hopefully allow us to take another look at rate increases and make adjustments after the fact.”

The ACA Kill Switch

Twenty million Americans signed up for the Affordable Care Act. To stay affordable, the plan mandated that healthy young people sign up, pay premiums and that the federal government provide a subsidy to insurers to help reduce the deductibles and co-pays for seven million lower income Americans.

House Republicans successfully challenged the low income subsidy in court last year. But the Obama administration kept the subsidy in place while the lawsuit was under appeal.

If Trump, through his HHS Secretary, Tom Price, M.D., stops those payments then insurers can either exit the market or raise premiums. Probably by at least 15%.

“This is a very potent threat, because the administration has the authority unilaterally to do this, and this is really a kill switch. This makes the program unprofitable for the majority of health plans operating in it today,” said Dan Mendelson, chief executive of Avalere Health, a consulting firm in an interview with The Washington Post. “The timing of this threat is really curious, in the sense that now is the time that the plans have to be deciding whether to bid on 2018.”

Pucker Factor

In Trump’s Wall Street Journal interview on April 12th, he described in detail how he and Secretary Price could collapse the Affordable Care Act by withholding those funds.

On Tuesday, April 18, insurers will be meeting with Seema Verma, administrator of the Centers for Medicare and Medicaid Services (CMS). The insurers slated to attend are the lobbying groups America’s Health Insurance Plans and the Blue Cross Blue Shield Association, as well as individual insurers such as Molina Healthcare.

Top on their agenda are the looming state filing deadlines and the subsidies for the seven million people who qualify under ACA.

There is almost no time left.

State of Washington Insurance Commissioner Mike Kreidler set May 5, 2017, as the date that health insurers must file their proposed plans and rates for 2018. Other state commissioners have set dates in May or June.

Kreidler said, when setting the deadline that he wanted to reassure the insurance-buying public that he is committed to stability in his state’s insurance market. Furthermore, he added “Insurers and consumers are understandably concerned about stability because of the uncertainty in Congress over changes to the Affordable Care Act (ACA) and no viable replacement.”

The May 5 deadline marks the formal start of Kreidler’s review of individual and small-group health plans and stand-alone dental plans for 2018.

Said Kreidler, “The sooner insurers file plans, the quicker we can review them and have a viable market available for Washingtonians.”

But insurers are not filing plans with the states because they have no idea what’s going to happen with the Trump and Price Administration.

The default, no risk position for risk-averse health insurers is to simply exit ACA.

It’s the health insurance industry’s pucker factor time.

How It Affects Orthopedics

Unless Trump pirouettes (which is entirely possible) or the Democrats, who’ve made the subsidy a top priority in the federal budget negotiations with Republicans and the White House, extract a commitment from the Trump Administration to fund the cost-sharing reduction payments—and fast—then seven million Americans are likely losing insurance.

As the following three charts illustrate, the passage of the ACA coincided with a sustained increase in orthopedic surgeries.

The ACA, we think, created a measurable increase in sales of orthopedic implants and instruments between 2012 and 2015.

Losing the ACA would certainly reduce demand for orthopedic services and implants.

Musculoskeletal problems comprise 18% of all office visits and one in two Americans have some sort of musculoskeletal complaint according to the American Academy of Orthopedic Surgeons.

Extrapolating to seven million people, that would imply 1.3 million musculoskeletal office visits would be, to paraphrase Trump, “Gone. Just gone.”

One Republican healthcare lobbyist, who spoke to The Washington Post on the condition of anonymity to speak candidly, said that insurers are confused and trying to read the tea leaves of Trump’s statement.

“From an insurance standpoint, the biggest thing is stability for the plans that are deciding whether to remain, and if you don’t have the cost-sharing subsidies for 2018—and they have to file rates and make final decisions by June or July—I think it’s going to be very hard for many plans to stay in,” the lobbyist told The Post.

Price’s HHS Plays With Deadlines

Secretary Price, who has vowed to kill the ACA, issued a new healthcare market stabilization rule on February 15 which set a series of new rate filing deadlines.

Some were extended, some were shortened.

Bottom line, they added new complexity to the process of deciding whether to remain in the ACA or to exit.

The deadline for filing qualified health plan (QHP) applications and rate table templates for coverage that includes a QHP was delayed from May 3, 2017 to June 21, 2017.

After that date (June 21), CMS deadlines eased up while insurance company deadlines were compressed.

CMS gave itself until August 2 instead of the earlier date of June 13 to give insurers notice as to corrections they will need to make in their applications. And CMS now can wait until September 15 to send its final correction notice to QHP insurers with a final list of plans rather than September 11.

CMS also gave itself an extra 20 days to send its final certification notices to QHP insurers.

Furthermore, the states were given an extra 12 days to send their final recommendations regarding QHPs to CMS.

But then CMS cut five days out of the schedule for insurers to petition to change their service areas. And CMS also moved the final deadline for insurers to petition to make changes in their QHP applications from August 21 to August 16. And the end of the limited window, during which insurers can correct data errors identified by the states or HHS, was moved up to October 7 from October 13.

Finally, insurers were given only two extra days to send their final signed agreements, confirmed plan lists, and crosswalks of 2017 to 2018 plans to CMS.

Between a Rock and No Place

So where does all this put insurers who have a matter of weeks to submit their rate and service plans to insurance commissioners around the United States?

It leaves them having to make a choice between their healthy, paying policy holders and what is increasingly looking like an ACA mirage.

Our guess is that they’ll avoid new risk and stand on the rock of their existing policy holders.

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The Cost of Donaldcare - Update

Walter Eisner • Thu, November 10th, 2016

President-Elect Donald Trump is going to take office in January. His website states that he is going to ask Congress to “immediately deliver a full repeal of Obamacare.”

With the White House, the U.S. Senate and House of Representatives all in the hands of Republicans, it’s not a question of if, and when, but how.

Congress already passed a bill to repeal the Affordable Care Act, but President Obama vetoed the legislation. That legislation was short on specifics of how the Act would actually be dismantled. One provision of note was that there would be a two-year transition period to give Congress and the new President time to craft an alternative.

If the stock market is any indication, drug companies are happy while hospitals are worried.

This past April, after candidate Trump began taking control of the Republican primaries, we published a story on the cost of, now, President-Elect Trump’s healthcare proposal. He has not added any new provisions since then. We are reprinting the story.

Note: The following article was first run April 4, 2016.

It’s time to take Donald Trump and his healthcare proposals seriously.

Trump is edging ever closer to the Republican nomination for president. As of March 31, 2016, he led his closest rival, Texas Senator Ted Cruz 736 to 463 in delegates to the Republican convention this summer. He needs 1, 237 to win.

There are another 1, 200 delegates to be capture in the remaining primaries. Cruz would need to beat Trump 2:1 for the remainder of the primary campaign to win.

Readers might remember Cruz leading the charge in the U.S. Senate in 2013 to shut down the government over Obamacare. We know about Hillarycare and Senator Cruz’s record about Obamacare speaks for itself.

But what about Donald Trump? What does he promise about healthcare if he is elected president?

Trump recently released a healthcare reform plan entitle “Healthcare Reform to Make America Great Again.” The plan seeks to repeal and replace the Affordable Care Act (Obamacare) and turn Medicaid into a “block grant” program.

If you are a deficit hawk, someone on the money end of orthopedics and healthcare or newly insured, you won’t like it.

The Cost of Donaldcare

Walter Eisner • Mon, April 4th, 2016

It’s time to take Donald Trump and his healthcare proposals seriously.

Trump is edging ever closer to the Republican nomination for president. As of March 31, 2016, he led his closest rival, Texas Senator Ted Cruz 736 to 463 in delegates to the Republican convention this summer. He needs 1, 237 to win.

There are another 1, 200 delegates to be capture in the remaining primaries. Cruz would need to beat Trump 2:1 for the remainder of the primary campaign to win.

Readers might remember Cruz leading the charge in the U.S. Senate in 2013 to shut down the government over Obamacare. We know about Hillarycare and Senator Cruz’s record about Obamacare speaks for itself.

But what about Donald Trump? What does he promise about healthcare if he is elected president?

Trump recently released a healthcare reform plan entitle “Healthcare Reform to Make America Great Again.” The plan seeks to repeal and replace the Affordable Care Act (Obamacare) and turn Medicaid into a “block grant” program.

If you are a deficit hawk, someone on the money end of orthopedics and healthcare or newly insured, you won’t like it.

Standard Republican Proposals

“Donaldcare” is mix of standard Republican proposals such as repeal Obamacare, sell health insurance across state lines, expand health savings accounts and block-grant Medicaid. Republicans in Congress have been kicking these ideas around for years.

Trump is no fan of insurance companies. Last August he said he’d like to see a private system without the artificial lines around every state. “I have a big company with thousands of employees. And if I'm negotiating in New York or New Jersey or California, I have like one bidder. Nobody can bid. You know why? Because the insurance companies are making a fortune because they have control of the politicians. They're making a fortune. Get rid of the artificial lines and you will have yourself great plans. And then we have to take care of the people that can't take care of themselves. And I will do that through a different system.”

The non-partisan Committee for a Responsible Federal Budget (Committee) reviewed candidate Trump’s healthcare proposals for that different system and found his proposal to repeal Obamacare would likely cost nearly $500 billion over ten years and almost double the number of Americans without health insurance.

Obamacare After the Election

Walter Eisner • Tue, September 25th, 2012

What will Obamacare look like the day after the November 6 election, or even on January 20, 2013 when the President is sworn into office?

Robert Laszewski, publisher of Health Care Policy and Marketplace Review, predicts it will look pretty much the same regardless of the outcome of the elections. Laszewski is president of Health Policy and Strategy Associates, LLC. He helps clients navigate health policy and market changes. He spent nine years as a COO of a health and group benefits insurer before forming his company in 1992 and is no fan of Obamacare.

Laszewski cites two main reasons for his prediction: The Electoral College and the Law.

Electoral College

Over the next 40 days and 40 nights, the skies will rain political ads on six contested states. We know they are contested because the campaigns have announced their heaviest media buys in those states.

Those states (Florida-29, Ohio-18, North Carolina-15, Virginia-13, Wisconsin-10, and New Hampshire-4) hold 89 undecided electoral votes. You need 270 votes to win the White House. If one assumes the remaining bright red states stay red and dark blue states remain blue, Barack Obama sits at 258 and Mitt Romney is at 191 electoral votes. Simple math says Romney will need to capture 79 of the 89 undecided votes. He has to win Ohio AND Florida, AND at least three out of the remaining four states. Obama only needs to capture Ohio OR Florida, OR any two of the remaining four states. In elections it's better to have "ORs" than "ANDs."

Congressional Math

But even if Republicans capture the White House, retain a majority in the House of Representatives AND capture the majority in the U.S. Senate, Laszewski writes that it took 60 Senate votes to pass the law and it will take 60 votes to repeal it, and, "there is no way" Romney will have that many Senate votes.

Robert Laszewski
Health Policy and Strategy AssociatesWhat Romney could do with a bare Senate majority, and Republican control of the House, is defund Obamacare.

Obamacare May Not Survive a 2nd Supreme Challenge

Walter Eisner • Fri, December 5th, 2014

U.S. Senator Chuck Schumer, the third ranking Democrat in the U.S. Senate and a chief proponent of Obamacare, dropped a bombshell at the National Press Club on November 25, 2014.

Schumer said the Democratic Party had made a political mistake by pushing for Obamacare. He said that after passing a stimulus package to jumpstart the economy during the economic downturn, Democrats "put all of our focus on the wrong problem" by turning to the healthcare reform effort.

"[I]t wasn't the change we were hired to make, " Schumer said, noting that 85% of Americans receive healthcare coverage from their employer or the government.

Schumer was explaining why he thought voters punished Democrats in the 2014 mid-term elections and returned control of the Senate back over to Republicans and increased the Republican majority in the U.S. House of Representatives.

It’s Called Balance of Power

The odds of either repealing Obamacare or the medical device tax, say knowledgeable Washington insiders, are small. Democrats can still filibuster and the President will certainly veto anything that threatens to upset his legacy legislative accomplishment.

While Schumer’s backtracking will certainly be red meat for those pushing to repeal and replace the healthcare law and dump the medical device excise tax, the real threat to Obamacare isn’t going to come from the legislative branch. It’s likely going to come from across the street from the Capitol building, the less public and more deliberate judicial branch, the U.S. Supreme Court.

The Court has agreed to hear King vs. Burwell and Chief Justice John Roberts will have a chance for a “do-over” after he enraged conservatives by siding with liberal justices in 2012 and writing the opinion that Obamacare was constitutional.

Obama’s Legacy Meets Robert’s

The healthcare law may well define the legacies of the President and the Chief Justice.

Obama’s historic legacy is already set if for no other reason than being the first African-American elected to the White House. But he will also be remembered as the President who successfully steered the country’s fiscal policy through the worst economic crises since the Great Depression.

8 Million Obamacare Customers Drive $$$

Walter Eisner • Mon, May 12th, 2014

On May 1, 2014 the U.S. Department of Health and Human Services (HHS) announced that over 8 million individuals had purchased a Qualified Health Plan (QHP) under the Affordable Care Act (ACA – a.k.a. Obamacare). Health plans are reporting that 80% or more of the enrollees have paid their premiums.

The same week the Bureau of Economic Analysis reported that healthcare spending is soaring.

Much has been made over what the new health insurance enrollees will mean to payers, physicians, hospitals and device makers. Will there be enough new customers to make up for the 2.3% medical device tax? Will there be enough physicians to serve the new enrollees? Will new enrollees pay up and what will happen to insurance premiums if enough young and healthy “Invincibles” don’t enroll to dilute the risk pool of older, less healthy enrollees? What will happen to utilization and pricing rates?

There is a lot of partisan political heat and smoke which clouds the information needed by those making decisions about how to respond and compete in this changing healthcare landscape. We looked to some non-partisan experts to shed a little light.

Will Enrollee’s Need Joint Replacements?

But first, let’s take a look at the numbers and demographic data about those enrolling in the federal and state healthcare exchanges.

Those under 34 years of age comprise about 34% of the enrollees. Enrollment skews towards women 54% to 46%. Think sports medicine.

Silver health plans comprised about 65% of total plan selections while bronze, gold, platinum and catastrophic plans made up 20%, 9%, 5%, and 2%, respectively. Approximately 85% of individuals who selected a QHP are scheduled to receive financial assistance. Over 4.8 million additional individuals were enrolled in Medicaid since the beginning of October 2013, bringing the total in Medicaid and CHIP to 64.6 million. The enrollment numbers understate total Medicaid and CHIP enrollment because not all states are reporting and the data are preliminary.

Florida enrolled nearly 1 million people, far more than any federal exchange state—and about 250, 000 more people than Texas, which has a larger population and more uninsured residents.